Light bulb pricing in the Twin Cities

ByJen Fuller |May 10, 2018

Jen Fuller is an Energy Policy Research Fellow at Fresh Energy and a PhD candidate at Arizona State University in Environmental Social Science.

For households of all income levels to benefit from the transition to clean energy, “access” must include not just strong policies and programs, but affordable options for everyday consumers as well. At the University of Michigan, Professor Tony G. Reames examines equitable access to affordable and clean energy technology, including a study on lighting options to be published this month in the journal Applied Energy.

Fresh Energy first learned of Professor Reames’ research at a recent energy and equity convening hosted by Elevate Energy in Chicago. We set out to replicate Professor Reames’ study in miniature to identify barriers for access to affordable lighting options for households in the Twin Cities area. Renters have limited options when it comes to efficiency measures, because impermanence and time and money factors don’t make sense for larger upgrades. However, access to efficient lightbulbs, like LEDs, is one area renters can save money directly on their bills. Professor Reames’ study found that the average cost of LED bulbs was the most expensive in the poorest ZIP codes surveyed in Wayne County, Michigan. As a renter, I was curious to find out whether households in the Twin Cities area experienced similar issues.

My experience through this study, along with the data I collected, suggests that households in the Twin Cities face disparities in the time and ease of access to purchase efficient and affordable lighting options for their homes. I also found that CFLs are largely being phased out of the Twin Cities market with many stores not carrying that type of bulb at all.

Methods

In the original study, Professor Reames—along with graduate students Michael Reiner and Michael Benjamin Stacey—asked the question, “Are energy-efficient light bulbs differentially available, and do energy-efficient light bulb prices vary to the disadvantage of those living in socioeconomically deprive[d] neighborhoods?” They looked at incandescent, halogen, CFL (compact fluorescent), and LED A19 bulbs that were in the 600-900 lumen range, replacing a baseline 60-watt incandescent bulb. They visited 130 stores across 19 zip codes in Wayne County using standardized data collection sheets, which they shared with Fresh Energy. They gathered data across “poverty strata” and listed them from 1 to 4, with 1 having less than 10 percent of households living in poverty and 4 having more than 40 percent of households living in poverty, according to the federal poverty line.[1]

The overall poverty rate in Minneapolis is 21.33 percent, while the whole of Hennepin County is 11.92 percent.[2] In Minneapolis and two of its suburbs, I visited seven or eight stores in each of five zip codes and tried to visit across the range of stores in Professor Reames’ study: small retail stores (i.e. corner stores), hardware stores, pharmacies, variety stores (i.e. dollar stores) and large retail stores (i.e. Target). In total, I visited 38 stores and collected data for 178 light bulbs. To be clear, this is not a full replication study, but rather a slice to discern possible trends. The poverty strata are described here as high (greater than 30 percent of households within the zip code living in poverty), medium (10 to 20 percent of households), and low (less than 10 percent of households).

Study limitations: The study began with comparing only two ZIP Code Tabulation Areas and grew organically to five. A limitation of the study is that there is only one high poverty strata included, while there are two low and two mid poverty strata included in the data.

Availability

By far the most prominently available type of bulb across all zip codes was LEDs (108) compared to CFLs (17), while incandescent and halogen bulbs were in-between with 27 and 26, respectively. This may be due to the lumen range for data collection, with some incandescents being too bright to count. It seems that CFLs are largely being phased out of the Minneapolis market and, of the data I collected, were more expensive than LEDs. Generally speaking, hardware stores and big box retailers like Target, Cub Foods, and Home Depot had the widest variety of bulbs. While hardware stores in the city offered good variety, the prices were higher, potentially due to the lack of economies of scale that bigger chains can offer. The chart below of bulb price by store type shows that the highest number of bulbs are available at large retail stores.[3] with Small retail stores had little on offer, but their prices were relatively low.

While the cost of light bulbs does not always correlate with high or low poverty strata, the number of bulbs available for purchase was very clearly related to the overall poverty strata by zip code. Lower-income neighborhoods have less access and choice of bulbs than higher-income areas. Higher-income neighborhoods in the City of Minneapolis are similarly lacking in number of stores where one might purchase a light bulb as are lower-income neighborhoods. Of bulbs available, pharmacies had the most expensive bulbs while big box stores like Walmart and Home Depot had the cheapest incandescent and halogen bulbs available. Not easily seen in the data shown is that of the 17 small retail stores surveyed, 11 had no bulbs—or none that fell within the parameters of the study. In other words, the type of stores within a neighborhood was often correlated to which, or even how many, lighting options would be available.

Affordability

Keeping in mind the limitations of our study, in contrast to Wayne County, the sampling of stores in Hennepin County indicate that LED cost isn’t as strongly correlated to percentage of households living in poverty here in the Twin Cities. In fact, the highest-income zip code visited yielded the most expensive LED bulbs ($4.77). The lowest-income neighborhood had the second lowest LED average price of those surveyed ($3.90), but the highest average incandescent price ($2.42). Out of eight LEDs this area had three bulbs subsidized with “before the register” rebates through Xcel energy for one dollar.

The chart below plots all of the price points by type of bulb and zip code. It’s clear to see from these charts that the higher-income zip codes had many more bulbs to choose from than the higher poverty strata areas. Many ZCTAs in Minneapolis span low, medium, and high poverty census tracts, as shown on this map from the Minnesota State Demographic Center. One of these studied contains both a wealthy neighborhood (Lake of the Isles with surrounding census tracts about 5.89 percent of households living in poverty), and a less affluent neighborhood in Near North (with 18.16 percent). This ZCTA had the least available bulbs of any type, but with many convenience stores in the Near North area carrying incandescent bulbs and a few LEDs. This suggests that the store owners know their customers and seek to provide a range of relatively cheap home goods.

The following bar graphs show the same information as above, but condensed into average price across bulb type by both store type and zip code.

Final Reflections

I began the study in my own zip code in Minneapolis, one without any big box stores and lots of corner shops. If I personally needed a light bulb quickly, I’d first check the convenience store across the street. They carried a three pack of cheap incandescent bulbs, which I likely wouldn’t purchase unless all of my light bulbs went out at once at night. If I wanted an LED bulb, I’d probably check out the pharmacy down the street. The first time I visited the store the home goods section was under construction. The hardware store in my neighborhood is actually in a different zip code, but I’d be able to find plenty of options there. My neighborhood is also well connected to bus routes, so finding a bigger store to shop at wouldn’t be a massive burden, transportation-wise.

Since I don’t own a personal vehicle, this research showed me how frustrating the hunt for an LED bulb might be if I didn’t know exactly where to look. On one of my first outings, I walked down a stretch of East Franklin Avenue and visited the smaller stores clustered there. The first three places I visited had no bulbs at all to offer, including Dollar General, which surprised me. I asked the clerk if they carried light bulbs and she said, “not anymore,” and did not know why they stopped carrying them. To visit many stores, including stores in lower poverty strata, I ended up renting a car. The suburban landscape is more spread out, and while the stores I visited in Eden Prairie are strung along the main commercial artery, it would have been incredibly time consuming to walk between stores.

Through our “in mini” replication of Professor Reames’ study, we learned some of the real barriers that households in the Twin Cities face to accessing new and emerging energy options. Though we need a larger sample to identify clearer pricing trends, more lighting options were available at larger retail stores, which were less likely to be located in lower-income areas. This suggests that lower-income households disproportionately face barriers of time and mobility to access affordable and efficient lighting options. As Minnesota’s clean energy transition continues, the retail market will need to shift to better reflect the strong energy efficiency policies in our state.

Footnotes

[1] Only one of the Zip Code Tabulation Areas (ZCTAs) in the Twin Cities met the initial study’s highest poverty strata (4) delineation of 40 percent or more of households living in poverty— the zip code surrounding the University of Minnesota, where many college students live. Recent census data allows exclusion of student poverty rates, and students are sometimes considered to be living in poverty for only a limited time. While I have thoughts on not counting student poverty as a major problem, that’s beyond the scope of this post. Outside of the university area, several individual census tracts met that requirement, and some are captured in the 55404 ZCTA in our study. The results presented here thus use 1 (low) as less than 10 percent, 2 (mid) as 10 to 20 percent and 3 (high) as greater than 30 percent.

New success stories developed by Xcel, CenterPoint, and the Minnesota Department of Commerce show the benefits of a “one-stop” whole building approach to spur energy efficiency in multifamily buildings.

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